For the Week Ending November 20, 2009

November 20, 2009

Washington, D.C., November 20, 2009 


Senate Democrat leaders said Tuesday they would put off debate on a climate change bill until springtime. The decision comes just weeks before the U.N. is set to host 40 world leaders for the Climate Change Conference in Copenhagen Dec. 10. President Obama has made passage of climate change legislation a top priority, but with the Senate set to debate health care legislation before Thanksgiving recess, among other issues, the “cap-and-trade” bill is expected to hibernate for the winter. With no action on climate change here in the U.S., and nothing to report to the international conference, the president may opt out of the Copenhagen meeting. The Senate climate bill, sponsored by Sen. Barbara Boxer, D-Calif., and Sen. John Kerry, D-Mass., calls for a cap-and-trade program, which would set a limit, or cap, on the amount of greenhouse gases that specific large industries such as energy utilities could release to the atmosphere. A business that has an emissions amount that falls below its cap could sell the unused amount up to the cap as offset credits; one that exceeds its cap would need to buy credits or reduce its emissions. The House passed its version of climate change legislation in June. Another issue with the timing of the climate bill is that it must pass six Senate committees before it can come to the Senate floor for a vote. So far only the Environment and Public Works Committee and Energy and Natural Resources Committee have taken up the bill.

The Senate Health, Education, Labor and Pensions Committee Wednesday approved a food-safety bill that would change the way the U.S. Food and Drug Administration deals with the nation’s food supply. S.510, sponsored by Sen. Richard Durbin, D-Ill., would allow the secretary of Health and Human Services to order a mandatory recall if a food company fails to voluntarily recall a product that could cause serious health consequences to humans or animals. The bill would increase fees from facilities subject to a re-inspection or food recall. The measure also would allow FDA to require certification for certain foods based on risk and to deny entry into the country of imported foods without certification. Sen. Lisa Murkowski, R-Alaska, offered an amendment, which was adopted by the committee, that would require HHS to conduct a study on transporting seafood to rural areas. While the livestock and poultry industries are not covered by the legislation, NPPC has a number of concerns with S. 510, including provisions that impose user fees, allow mandatory recalls, set performance standards and impose civil penalties. The House passed its version of food-safety legislation in July. The Senate bill is expected to move to the Senate floor for a vote soon.


President Obama this week indicated he’ll work to get approved in 2010 a trade deal between the United States and South Korea. The president met Wednesday with South Korean President Lee Myung-bak. In a letter sent to the president earlier this month, 88 U.S. House lawmakers – 44 Democrats and 44 Republicans – urged Obama to “prepare the U.S.-South Korea Free Trade Agreement (KORUS) for congressional consideration.” NPPC worked closely with the Office of the U.S. Trade Representative to get favorable treatment for U.S. pork and pork products in the Korea FTA. The United States entered negotiations with South Korea on a trade agreement in February 2006, and a deal was formally completed April 1, 2007. The FTA, according to NPPC, will generate hundreds of millions of dollars in new pork exports and ensure that U.S. pork exports to South Korea will be on an equal footing with pork from other countries. Chile, for example, enjoys lower duties on its pork exports to Korea – and will have unlimited duty-free access by 2014 – because of a trade agreement it has with South Korea. That deal took effect in 2004. According to Iowa State University economist Dermot Hayes, the U.S.-Korea agreement will increase U.S. live hog prices by $10 per head.


The World Trade Organization this week agreed to consider complaints from Canada and Mexico against the U.S. mandatory country-of-origin labeling (MCOOL) law. The WTO set up a dispute settlement panel to rule on the grievances. The 2008 Farm Bill included the MCOOL statute, which requires pork, beef, lamb and goat meat – and certain other commodities – to be labeled in one of four categories:
•    Product of the U.S. if the animals from which the meat was derived were “born, raised and slaughtered” in the United States.
•    Products of the U.S. and the other country if meat is from animals born in another country but raised and slaughtered in the United States, such as Canadian feeder pigs.
•    Product of a foreign country if meat is from animals born, raised and slaughtered outside the United States.
•    Product of more than one country, with a list of them, for meat from animals born, raised and/or slaughtered in more than one country – other than the United.
NPPC opposed MCOOL but, when it was apparent that congressional lawmakers would include it in the Farm Bill, worked to get changes to the original proposal, obtaining flexibility in labeling and recordkeeping for verifying an animal’s country of origin. Canada and Mexico claim that the labeling requirements lead consumers in the United States to discriminate against their products, a violation of WTO rules requiring equal treatment of domestic and imported products.


The Senate Agriculture Committee Wednesday held a hearing focusing on the effects of financial reform legislation on end users. Committee Chairwoman Blanche Lincoln, D-Ark., said she intends to draft legislation that will bring much-needed transparency and accountability to the over-the-counter (OTC) derivatives market. Lincoln’s plan would bring the $450 trillion market in derivatives under federal regulation. Among those on hand to testify at the hearing were Gary Gensler, chairman of the Commodity Futures Trading Commission; Glenn English, CEO of the National Rural Electric Cooperatives; and Mark Boling, executive vice president and general counsel for Southwestern Energy Company. Lincoln said the committee will hold a second hearing on financial regulation on Dec. 2. Treasury Secretary Tim Geithner will testify at the hearing. The House Agriculture Committee Wednesday approved legislation regulating over-the-counter derivatives. A similar measure was also cleared by the House Financial Services Committee. The Agriculture panel bill would require standardized derivatives to be cleared through central clearinghouses and traded on an exchange or other regulated platform, subject to rules set by the Commodity Futures Trading Commission and the Securities and Exchange Commission, as a way to bring transparency. Transactions that involve “end users,” such as processors, manufacturers and utilities, would be exempt from clearing. Last summer, the Obama administration proposed a package of OTC reforms that would require standardized OTC transactions to go through clearinghouses and to trade on federally regulated platforms.


The Chicago Mercantile Exchange (CME) is offering their annual scholarships to four college students who intend to pursue careers in the pork industry. NPPC administers the Lois Britt Memorial Pork Industry scholarship selection process. This marks the 20th year of the CME scholarship program, which recognizes outstanding youth in the pork community. To be eligible, students must be undergraduates in a two-year swine program or a four-year college of agriculture, provide a brief letter describing their expected role in the pork industry, write an essay on an issue affecting the pork industry and submit two letters of reference from professors or industry professionals. For more information on the program and eligibility requirements, click the following link: Pork Industry CME Scholarship.



The House Agriculture Subcommittee on Conservation, Credit, Energy, and Research is set to hold hearings Dec. 2-3 on climate change legislation. The hearing Dec. 2 will focus on the impact of climate change on the farm sector, while the hearing Dec. 3 will focus on the costs and benefits of agriculture offsets.


The Senate Energy and Natural Resources Committee will meet Dec. 2 at 10 a.m. to hold a hearing on policy options for reducing greenhouse gas emissions.


The Senate Agriculture, Nutrition and Forestry Committee will hold a field hearing on revitalizing rural America Nov. 23 in Little Rock, Ark.